Thursday, October 12, 2006

Paperstand

According to the WSJ, Yahoo (YHOO) is in talks to acquire Facebook. But ppl familiar with the matter say that talks aren't making much progress. While discussions are continuing, no purchase of the closely held Facebook social-networking site is imminent. They say a deal is unlikely unless Yahoo increases its roughly $1bn offer or changing business conditions made Facebook's mgmt more inclined to sell.

The WSJ’s “Heard on the Street” column discusses eBay (EBAY), saying that trouble seems to be following the co, even as far as China. Late last month, the CEO of eBay's Chinese unit resigned abruptly. eBay also is in talks to sell part or all of its Chinese operations to Hutchinson’s media flagship, Tom Group. Such a sale would be a setback for eBay, which invested $100m last year to further its ambitions in China. A deal would foster the perception among stock-mkt investors of "how difficult and challenging the China mkt has been for them," says Mark Mahaney, of Citigroup. "It would be perceived as a negative."

Barron’s Online suggests that recently resurgent healthcare stocks may be ignoring the risks if Democrats recapture the House of Representatives and gain ground in the Senate in Nov's mid-term elections. While it's difficult to assess the investment risks of future political activity, it's clear that Democrats support an array of policies that could zap some healthcare stock sectors, especially pharmas, by adding new regulations, putting more generic drugs on the mkt and controlling prices Medicare pays for drugs. "Healthcare is the most politically charged area of the mkt," says Jack Ablin, of Harris Private Bank. Just the prospect of Democrats banging their drums could take a toll on large drug makers like Pfizer (PFE) and health insurers Humana (HUM) and WellCare (WCG). "With the election around the corner, healthcare investing could become increasingly treacherous," Ablin added. "There will be lots of jawboning on this issue," says Barbara Ryan, of Deutsche Bank. "There will be a lot of headlines, but very little follow through."

“Inside Scoop” section reports that Atticus Mgmt, a hedge fund, which owns a 9.97% stake in Phelps Dodge (PD), had "met with several potential investors, including private equity firms and strategic buyers, to discuss each firm's possible interest in pursuing an acquisition of [Phelps Dodge]."